Pizza Delivery Drivers Shorted on Vehicle Reimbursements Achieve Class Settlement in Largest Michigan Lawsuit of its Kind   

Pizza Delivery Drivers Shorted on Vehicle Reimbursements Achieve Class Settlement in Largest Michigan Lawsuit of its Kind   

Pizza franchises take a slice out of every driver’s pay.

Final approval of the $650,000 settlement package clears the way for the largest known class action settlement of its kind in Michigan – covering ten Hungry Howie’s franchise locations in Mid-Michigan. The Pizza Driver Lawsuits alleged a common complaint among drivers in the industry – that systematic under-reimbursement for mileage and vehicle expenses violates the federal Fair Labor Standards Act and Michigan Minimum Wage laws.  Even while consenting to the settlement, the pizza stores continue to deny liability and deny that they underpay drivers for their vehicle expenses.

How did the Pizza Driver Case Start?

The case started four years ago in 2016, when one Pizza Delivery Driver came forward to disclose a systematic under-reimbursement of vehicle and mileage expenses.  According to some estimates, drivers were reimbursed only 10-20 cents per mile (75 cents per delivery that might take 5-10 miles each) – even while the Federal IRS mileage reimbursement rate rose to more than 58 cents per mile. Blanchard & Walker filed the first lawsuit, McFarlin v.  The Word Enterprises et al. alleging violations of Federal and State Minimum Wage Law against a handful of mid-Michigan Hungry Howie’s Franchises. The McFarlin case was certified for class action status in 2017.

Then we heard from more delivery drivers at related franchises: telling us that the challenged reimbursement practices were even more widespread. Blanchard & Walker filed a companion case, Graham v. The Word Enterprises et al. in 2017.  In all, the class action settlement will cover over 400 drivers in ten Hungry Howie’s franchises in Lansing, East Lansing and other mid-Michigan locations.   Delivery drivers who did not opt-out will receive a share of the $650,000 settlement based on the number of miles driven.

What if I was forced to sign an arbitration agreement?

The settlement will also pay pizza delivery drivers that Defendants had sought to bar from the lawsuit (arguing that those drivers must be forced to arbitrate their claims individually and should not even receive notice of the Court cases). Ultimately, the settlement reached will cover 100+ drivers that had been previously dismissed and ordered to individually arbitrate their claims.  Since the initial settlement was reached, the Sixth Circuit Court of Appeals has clarified that plaintiffs have a right to challenge the validity of forced arbitration agreements in Court before being forced into private arbitration.

How are class action payments made?

Under the Settlement Agreement, all eligible class members who do not opt-out receive settlement awards to compensate for under-reimbursed vehicle expenses that sent their actual wage plummeting well below the lawful minimum wage.  Some eligible class members will receive hundreds or even thousands of dollars to reimburse for alleged expenses and address the minimum wage violations alleged in the two class action cases.  Under the settlement, all awards to class members are proportionate based on the number of deliveries made by the class members.

What if I did not receive notice?  Will I still get a settlement check?

Court approved notices were sent to the entire settlement class on or about January 23, 2020.  If you are an eligible class member under the Graham/McFarlin cases your notice and class rights have been sent to your last known address and should be in your mailbox. Settlement checks were sent in June to the same address unless you contacted us to make corrections. If you did not receive notice, your address and mail forwarding may be outdated.

If you believe you are an eligible class member but did not receive the notice, you can contact class counsel by clicking here.

How do I find more information about FLSA rights?

Blanchard & Walker has a record of achieving remarkable results for Michigan workers in FLSA cases for minimum wage and overtime violations under the FLSA and Michigan wage laws. Common wage fraud schemes include:

For questions regarding the content of this post, you can contact the authors at Blanchard & Walker PLLC.